⚠️US equity market breadth is flashing RED: The S&P 500’s performance and its market breadth, meaning how many stocks are actually moving with the index, have diverged on 52 trading days so far this year, according to BTIG. That already matches 2000 for the 3rd-highest number of divergence days this century, and with July not even over, 2026 is on track to set a new record. Much of this gap has been driven by AI-related stocks. Software stocks came under pressure earlier this year as investors questioned AI’s impact on coding, semiconductor stocks went from leading the rally to entering a sharp downturn within days, and Oracle closed this week at its lowest level in years. Meanwhile, the VIX remains below 20 points, below its long-term average, suggesting investors still expect relatively calm conditions for the S&P 500. But volatility across individual stocks tells a different story. The VIXEQ index, which measures single-stock volatility, is above 50, pushing the gap between broad-market and stock-level volatility to a record high. Market stress is spreading underneath.